Monday, May 23, 2011

Peter G. Peterson, A Poor Boy Done Well

Atrios posted today about the Peter G. Peterson Foundation, a creation of Pete Peterson himself, the son of a poor Greek immigrant who is now a billionaire and into fiscal prudence, and who wants to save the greatness of this country from too large a government. The list of participants in the Foundation's latest fiscal summit includes our very favorite columnist, David Brooks! A known expert on economics.

But I want to write about something slightly different :

In the comments to that post, chichimec linked to an older interview with Peterson which had this gem:

P.P.: Look, part of it is because I'm a Depression baby, and I had parents who emphasized economical living to excess. We had to turn off the lights in every room in the house at all times—turned off the heat in the winter in the living room—and my father kept his last car, I think, 15 years or some damn thing, and he gave away a lot of money to his family back in Greece, plus the local community. So I'm not being critical of the current boomers, because if I were a boomer, I might feel that way. I am a Depression baby. Giving back was part of my upbringing. So when I put a billion dollars in this foundation, it's perhaps some measure of my passion and sincerity that this wonderful country is to a certain extent in peril. And I am willing to pay more taxes. I would love to see it as part of a major spending reduction package. And I told you that I've been supportive of increasing marginal rates, and I'm also a fiscal conservative. I know enough about the numbers to know that it's not going to solve the problem, as attractive as it may sound politically, to tax the rich. I'm quite willing to be taxed more. I would just raise the question, If you're going to increase taxes, how are we going to have the least distorted effect on the economy, and shouldn't it be fair? In other words, what is the argument for just picking on private equity partnerships from this maze of partnerships in the country? If people believe that carried interest shouldn't be taxed at the capital gains rate, well, then, why not tax all the partnerships? What is the fairness of the tax policy?

The bolds are mine, and it is the bolded sentence I wish to talk about. It appears to be received wisdom on the right that taxing the rich more is not enough to fix the problems of "runaway big government." But why is it not enough? Remember that it's not the number of rich people which matters here but the amount of money they have as a group.

And on that fifteen-year old car? Mine can vote next year! Lovely thing he is! Allows rally racing and parking on a dime.

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